The Impact of BRAC

Virginia has fared better than expected

VirginiaBusiness.com - November 30, 2011, By Tim Loughran

It’s been six years since Congress approved the fifth (and most recent) round of military Base Realignment and Closure (BRAC) cutbacks. On Sept. 15, all building projects and personnel relocations were supposed to be done. In Virginia, however, a fair amount of work remains unfinished.

Overall, Virginia made out better than expected. Instead of losing more than 1,500 full-time jobs (as the Pentagon projected in 2005), Virginia added more than 5,200 jobs from various BRAC projects, according to data compiled by the Virginia National Defense Industrial Authority (VNDIA), the state agency created in 2005 to monitor and help implement BRAC projects and other U.S. military investments around the commonwealth. And, instead of $2.7 billion in new military construction, building activity across the commonwealth related to BRAC exceeded $6.6 billion.

One of the largest and most controversial projects was the Mark Center in Alexandria. It took $1.08 billion to build and prompted criticism about adding to Northern Virginia’s already congested roads. About a third of the 6,400 Pentagon employees scheduled to relocate to 1.8 million square feet in the Mark Center from numerous commercial properties around the District of Columbia had done so by the September deadline. Another third are scheduled to move in by the end of this month, and a final group of 1,900 by August 2012.

Unfortunately, it might take “four or five years” to complete all the public transportation infrastructure and highway improvements needed to ease the epic traffic jams that the massive move is expected to cause along the roads surrounding the complex’s location at the intersection of Seminary Road and Interstate 395, says Stan Scott, executive director of VNDIA. In fact, on Nov. 1, the Department of Defense announced a long-awaited $180 million project to widen three miles of Route 1 from four lanes to six outside Fairfax County’s Fort Belvoir for automobiles, buses, bicycles and pedestrians. However, work is not scheduled to begin until 2013.

Originally, Fort Monroe in Hampton, a stone fortress surrounded by a moat, was scheduled to be shut down by the Pentagon and the property turned over to the commonwealth three months ago. However, a delay in the final cleanup of the 177-year-old fort, once hailed as the “Gibraltar of the Chesapeake,” will keep the property in Army hands until January or February at the earliest. (At press time, local officials were hopeful that a squabble over two small, separate parcels of land on the periphery of the complex between the Army and the Commonwealth of Virginia would not delay the official handover any further.)

Terrie L. Suit, Virginia’s secretary of Veterans Affairs and Homeland Security and Gov. Bob McDonnell’s point person on all things related to the U.S. military, says the lingering delays in BRAC projects are minor. “We’ve got some things to resolve,” she says. “It’s just like building a house. Everything is up and almost complete ... but we’ve got to clean up the final details … the little stuff.”

The BRAC process, first launched in 1988, analyzes the country’s overall military infrastructure to see how it meshes with evolving defense needs and then cuts away any excesses.

During the latest round of BRAC projects, Fort Belvoir saw the largest slice of all military construction spending, more than $3.95 billion, for five projects. They included: almost $1.8 billion for the National Geospatial-Intelligence Agency; $1.08 billion for the Mark Center office park in Alexandria; almost $1 billion for the new on-base community hospital and medical center and $38.5 million for the Missile Defense Agency. Another $65.7 million was spent building the Joint Use Intelligence Analysis Facility at Rivanna Station, a Fort Belvoir satellite facility located on Route 29 north of Charlottesville. There more than 1,000 employees selected from three of the nation’s top intelligence agencies now work at a modern 175,500-square-foot facility on almost 50 acres of land.

The Pentagon spent almost $1.2 billion on new construction at Fort Lee in Hopewell to expand the base, build a new ordnance school and consolidate in one location the transportation management, culinary training and quartermaster schools that branches of the Armed Forces used to operate in other regions of the country.

Outside Fredericksburg, $325 million was spent at Marine Corps Base Quantico to gather in one installation all of the Armed Forces’ respective military investigative agencies, and $135 million was spent at Joint Base Langley-Fort Eustis to accommodate the Army’s Training and Doctrine Command personnel (who used to work at Fort Monroe) and renovate aging Air Force facilities.

With the Pentagon all but finished with BRAC construction upgrades, the focus now turns to what private companies plan to do outside the gates of different installations to sell more products and services to families spending federal paychecks.

In the neighborhoods outside Fort Lee, the first wave of inquiries from military subcontractors looking for office space nearby on state Route 36 already has begun, says Jeff Stoke, the head of the Prince George Economic Development Office. “We’re getting calls from the smaller spinoffs, for spaces of 5,000 to 10,000 square feet,” he says. “They tell me ‘I’m bringing in about 20-25 employees … I’ve got a subcontracting job at the base.’ That’s constant.”

Among the area’s retailers, however, the story is less positive. One area executive, who asked to remain anonymous, says, “We feel that ultimately, the growth of Fort Lee is going to be very impactful and very good for the region and that in five years there will be significant investment outside the fence. But right now, there’s very much a wait-and-see attitude.”

VNDIA helps companies establish operations around military installations. Scott, the agency’s executive director, says there has not been any significant new investment yet around Fort Belvoir or the Mark Center in Northern Virginia, “but we are starting to get calls from folks ... doctors, dentists, professional services people ... interested in starting small businesses in the area.

“Over the course of the next two to three years, you’ll see a rise in retail activity,” adds Scott. “In the next five to six years you’ll see the impact on schools and transportation … and within 10 years everything will be pretty much settled.”

In Hampton, the development energy is much stronger, according to G. Glenn Oder, executive director of the Fort Monroe Authority (FMA), the agency created by the General Assembly in 2010 to manage the transfer of the base and all its buildings from the federal government to the Commonwealth of Virginia.

Roughly half the 565-acre Fort Monroe complex — including beachfront, woods, wetlands, lawns and playing fields — will be a national park and open to the public for tourism and recreation. The remainder will be developed during the next 10-20 years, combining retail, commercial, residential and industrial activities.

To date, FMA officials have leased more than 50 of the apartments and large private homes (some as old as Fort Monroe itself) that used to house generals, officers and enlisted men. It has also renewed the leases of a bank, a garage and a church that paid rent to the Army. Additionally, the City of Hampton has leased one building with basketball courts and an indoor pool for its parks and recreation department and another for its police academy.

For the next six months or so, the FMA will evaluate almost two dozen master-plan proposals submitted earlier this year by private real estate developers, many of them specialists in adaptive-use projects that combine federal and state tax credits to restore and rehabilitate historic buildings. After the public has an opportunity to comment on a select group of finalists, groundbreaking on new homes and commercial space can begin, Oder says.

And if Oder gets his way, one guaranteed anchor tenant will be the proposed Virginia STEAM Academy, a boarding school for about 1,000 high school students from around the state who want to pursue careers in science, technology, engineering and applied mathematics.

“Now it’s time to build the vision,” says Oder, enthusiastically. “In 10 years Fort Monroe will be a vibrant community where people can work, live and play within walking distance of their homes … We’re very excited ... It’s just an amazing piece of property ... Virginia is a beautiful place, but Fort Monroe is perhaps the most amazing place in the state.”